In a recently handed down judgment, the Federal Court has ordered Optus Internet Pty Ltd (“Optus”) to pay penalties of $1.5m for making misleading representations to customers about their transition from Optus’ Hybrid Fibre Coaxial (“HFC”) network to the National Broadband Network (“NBN”).
The Australian Competition and Consumer Commission (the “ACCC”) instituted proceedings against Optus in the Federal Court in 2017. The ACCC acknowledged that Optus has been co-operating with its investigation, including agreeing to a Statement of Agreed Facts and Joint Penalty Submissions leading to the current decision.
From October 2015 to March 2017, Optus informed around 14,000 of its customers that their services would be disconnected (some in as little as 30 days) if they did not move to the NBN. Under the terms of its contract, Optus could not force disconnection within the time-frame it claimed.
For more information, see TimeBase’s previous article regarding this case.
The ACCC alleged that Optus also made misleading representations to customers that they had to sign up to Optus’ NBN services, when they could have chosen any internet service provider. Optus benefited by around $750,000 as a result of the conduct.
According to the, Optus also misled customers by saying they could only sign up with Optus NBN, when in fact they had the option to consider competing networks such as Telstra, TPG or iiNet. Optus also had a financial incentive as it received migration payments from NBN Co for each customer it moved to an NBN-based service.
The article also reports that receiving these payments was important for Optus, which even went as far as calling them a "bounty" as they formed part of their annual financial targets.
Commenting on this judgment in an, ACCC Chairman Rod Sims said:
Since the ACCC instituted proceedings against Optus in December 2017, the telco has paid $833,000 to customers affected by the forced disconnection. Also during 2017, the ACCC forced Optus to compensate more than 8,700 of its customers after charging them for download speeds they could not receive over the NBN.
Customers who were connected to its Boost Max plan that offered speeds of 100 megabits-per-second could only receive half that speed, while some users on Optus’ 50 megabit-per-second NBN plan were found to have clocked half that speed, or less.
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Optus to pay $1.5 million for misleading customers during NBN transition –
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